Archive of posts for categoryTrade, Economics and Environment

The presidents of Russia, Kazakhstan and Belarus formally signed an agreement on Thursday to create a limited economic union — an alliance hobbled by the absence of Ukraine but one long pursued by President Vladimir V. Putin of Russia to confirm his country as a global economic force.

“Today we are creating a powerful, attractive center of economic development, a big regional market that unites more than 170 million people,” Mr. Putin said during the ceremonies. He underscored the significant energy resources, work force and cultural heritage of the combined nations.

This treaty, which was signed this past week but is not expected to come into force until January 2015, marks the next step in transforming the still-nascent Eurasian Customs Union (ECU) into the Eurasian Union (EEU). Russian pressure for Ukraine to turn away from association with the European Union and towards Moscow-led Eurasian integration was one of the roots of the current crisis.

As the Shanghai Cooperation Organization (SCO) with China and the Central Asian states is Russia’s answer to U.S. military alliances, Eurasian economic integration is meant to be Russia’s response to EU and U.S. economic power. According to a chronology in a report by the Centre for European Policy Studies, the creation of the EEU was first suggested by the President of Kazakhstan, Nursultan Nazarbayev, in 1994. There was not much movement until the negotiation and signing of a customs union treaty among Russia, Belarus, and Kazakhstan in 2007. The basic requirements of the Eurasian Customs Union came into force in 2010, which were essentially trade policy coordination measures establishing a common external tariff among its members. However, the deepening Eurasian economic integration was given a boost by an op-ed by Russian President Vladimir Putin in October 2011.

In early 2012, the member states deepened ECU’s institutions by starting the operations of the Eurasian Economic Commission, a supranational entity that was contemplated in the 2007 treaty, to manage the external trade regulations of the member states, including relations with the WTO. That also marked the establishment of the “single economic space” (SES) among the member countries which, in the words of the Centre for European Policy Studies paper, “envision[ed] further regulatory convergence and harmonisation of national laws” in particular economic sectors.

The treaty that was signed on May 29th is ostensibly to move from customs union towards a full economic union, with free movement of goods, capital, and people among the member states, but reality has so far proven to be less sweeping and heroic than the rhetoric that marked the occasion. The most obvious issue is that the EEU was originally envisioned to include not only Russia, Belarus, and Kazakhstan, but also Kyrgyzstan, Armenia, and especially Ukraine. Ukraine would have added a populous country with economic potential and an an economy that (unlike Russia and Kazakhstan) was not based on natural resource exploitation. But Russia’s intervention in Ukraine backfired: not only did it fail to bring Ukraine into the EEU fold but, according to a Radio Free Europe report, it has weakened the EEU by having: (more…)

I’ve been settling into my digs this summer at the National Taiwan University College of Law as a visiting research fellow with the support from a grant from the Taiwan Fellowship. Mostly, I’ve been spending my time eating my way through what I believe is the best Chinese food scene in the world (I am posting pictures of my eating exploits on my facebook page for those interested in Chinese food).

The lively Taiwanese media has been following these riots with much more intensity than their Chinese counterparts, because a large proportion of the burned or trashed businesses are actually owned by Taiwanese nationals, with Chinese workers or managers administering it for them. TV news here is filled with pictures of Taiwanese flying home with harrowing stories of dodging rioters by hiding in trash cans, etc. Their plight has caused some soul-searching here in Taiwan because Taiwan’s status as a non-country that is recognized in Vietnam only as a province of China means they receive the blowback for China’s actions and Taiwan’s government has limited means to respond and protect their own nationals. (Their foreign ministry did helpfully issue stickers to their nationals saying, in Vietnamese, “I am from Taiwan”. Reminds me of the time I was told to put little Canadian flags on my backpack when I wandered through sketchy areas of Egypt).

In addition to advising their nationals to emphasize their “Taiwaneseness”, the Taiwan government’s main action has been to invoke the 1993 Taiwan-Vietnam Investment Promotion and Protection Agreement (in Chinese). The Taiwan government is using this agreement as proof that it can protect and seek compensation for its nationals abroad.

This is sort of like a bilateral investment treaty, but not quite, because of Taiwan’s odd non-country status. It is technically an agreement between the “Taipei Economic and Cultural Office in Vietnam and the Vietnam Economic and Cultural Office in Taipei” which means it is an agreement between two quasi-government agencies, and not the governments as a whole. This means it is unlikely to be governed by international law, although the agreement doesn’t choose any governing law either. Moreover, the agreement does not provide for referral to an ICSID tribunal for any investor claims against the host government (in this case Vietnam). Rather, it seems to allow for referral to arbitration under the “1988 International Chamber of Commerce” Rules. Moreover, such referrals seem to require the mutual consent of the parties in Article 8.This might allow Vietnam to block a referral to arbitration by a Taiwanese investor. (Oops! This provision refers to disagreements between the two parties to the agreement, not the investor and the host state. Sorry about the misreading. But I think my larger critical take stands). Since the Agreement doesn’t otherwise waive Vietnam’s state immunity, I am not confident about the ability of an investor to enforce any awards from an ICC tribunal without such consent anyway.

In other words, I am skeptical that the Taiwan-Vietnam Agreement is going to be very effective at winning compensation for investors. Instead, if I was a Taiwanese investor, I would think about invoking the Vietnam-China BIT. True, that agreement is limited to natural persons and economic entities who have the “nationality of the People’s Republic of China”, but it is not entirely clear this would exclude the PRC’s “Taiwanese compatriots” who are officially treated in China as “nationals” for some purposes. Even if this argument doesn’t fly, many of the Taiwanese companies in Vietnam may have Chinese national employees or entities that could make a claim on their behalf. Of course, this would be pretty bad PR here in Taiwan, where no one really wants to be associated with the Chinese government. But if they managed to get an ICSID tribunal constituted, a Taiwanese investor has a much better chance to forcing Vietnam to pay out compensation under the Vietnam-China BIT than the Vietnam-Taiwan agreement. Another example of why being a non-state is such a pain for Taiwan and the Taiwanese.

I would like to continue the theme of the emerging convergence of investment arbitration and international trade. In my previous posts (discussed here and here) I discussed the prospect of using trade remedies to enforce investment arbitration awards. Another key example of convergence addresses the emerging trend of relying on investment arbitration to enforce international trade rights. As discussed in my recent article, despite the assumption that international trade disputes must be resolved before the WTO DSB, the existence of broad umbrella clauses in BITs present a promising vehicle for enforcing investment commitments in trade agreements.

Of course, the scope of umbrella clauses is dependent on the language in particular BITs, which varies widely from one treaty to the next. Accordingly, there is no uniform understanding as to the meaning of umbrella clauses. Narrow umbrella clauses are unlikely vehicles for vindicating international trade rights. A treaty commitment such as that addressed in SGS v. Philippines to observe any obligation a Contracting State “has assumed with regard to specific investments” is unlikely to encompass legislative measures or treaty commitments. By contrast, broad umbrella clauses are better candidates for vindicating trade rights, such as the BIT clause at issue in Noble Ventures, Inc. v. Romania, which committed Romania to “observe any obligation it may have entered into with regard to investments.”

ICSID tribunals have interpreted broad umbrella clauses to give investors treaty rights with respect to unilateral undertakings of the State embodied in municipal law. In CMS Gas Transmission Co. v. Argentina, the tribunal concluded that utility tariffs designed to attract foreign investment were “legal … obligations pertinent to the investment.” In LGE v. Argentina, the tribunal concluded that abrogation of guarantees made to investors in a statutory framework gave rise to liability under the umbrella clause. In Enron v. Argentina, another tribunal concluded that the umbrella clause referred to “any obligations regardless of their nature.” This included not only contractual obligations, but also “obligations assumed through law or regulation” that are “with regard to investments.” In Sempra Energy International v. Argentina, a tribunal found that major legal and regulatory changes introduced by the State as part of its public function constituted treaty violations under the umbrella clause. Finally, in SGS v. Paraguay, a tribunal interpreted a broad umbrella clause as creating “an obligation for the State to constantly guarantee observance of its commitments entered into with respect to investments of investors of the other party. The obligation has no limitations on its face—it apparently applies to all such commitments, whether established by contract or by law, unilaterally or bilaterally.”

Note that these sweeping pronouncements do not require that a State’s commitment reference a specific investment or contract. As long as legislative or executive measures relate to the promotion or regulation of investments, they constitute unilateral undertakings covered by a broad umbrella clause. Such ICSID jurisprudence has led María Cristina Gritón Salias to conclude in this book that “tribunals overwhelmingly accept the application of umbrella clauses to obligations assumed unilaterally by host States,” whether those undertakings are “made through legislation or otherwise.” Likewise, Darius Chan has opined here that “the current tide of jurisprudence concerning umbrella clauses is in favor of such clauses encompassing host State commitments of all kinds.”

Assuming such interpretations are correct—which is by no means clear—this has significant implications for the WTO. If trade obligations are subject to investment arbitration, it would authorize private parties to initiate trade cases. Private rights of action through investment arbitration would supplement the diplomatic espousal of claims before the WTO.

This is precisely what one foreign investor has argued with respect to alleged WTO violations as a result of Australia’s plain-packaging laws. On November 21, 2011, Philip Morris Asia Ltd. filed an investment arbitration claim against Australia pursuant to the Hong Kong-Australia Bilateral Investment Treaty. The central contention of Philip Morris is that Australia’s plain packaging legislation violated various international obligations. Among the claims it filed is one under the broad “umbrella clause” in the BIT, which provides that “[e]ach Contracting Party shall observe any obligation it may have entered into with regard to investments of investors of the other Contracting Party.” According to the Notice of Arbitration:

This [umbrella clause] obligation is broader than specific obligations … made by the host State to investors…. It also encompasses other international obligations binding on the host State that affect the way in which property is treated in Australia…. [T]he relevant obligations are those enshrined in TRIPS, the Paris Convention, and TBT. [Claimant] as an owner of the investments is entitled to expect Australia to comply with its obligations pursuant to those treaties. By adopting and implementing plain packaging legislation, Australia has failed to observe and abide by those obligations.”

The meaning and scope of such provisions is a matter of great controversy. However it is clear in the instant case that … the “umbrella clause” in Article 2(2) cannot be understood as encompassing general obligations in multilateral treaties…. Rather … the “umbrella clause” … only covers commitments that a host State has entered into with respect to specific investments…. [T]he obligations under the multilateral treaties … are not “obligations” which have been entered into with regard to investments of investors” of Hong Kong, but are rather obligations that operate on the inter-State level, with their own particular inter-State dispute resolution procedures.

It is too early to assess the likely success of such claims, but if the recent “umbrella clause” jurisprudence is accurate the claims are at least colorable.

This potential convergence of trade and arbitration has profound implications for the resolution of WTO violations. An arbitration panel liberally construing a broad umbrella clause could transform how WTO obligations are adjudicated. Exactly how would the adjudication of WTO obligations through investment arbitration alter the landscape? Here are a few thoughts.

First, umbrella clauses in BITs could create a private right of action for resolving WTO disputes. Investment arbitration circumvents the traditional barriers to initiating a WTO dispute. Diplomatic espousal is no longer a reliable check on the pursuit of unmeritorious claims. Through umbrella clauses foreign investors could seek recourse for violations of investment obligations that form part of WTO disciplines.

Second, with WTO dispute settlement the Member States control all decisions with respect to adjudication and resolution of the dispute. Investors may prefer an alternative dispute settlement process that places such decisions within their control. The incentives to settle an investment dispute depend on satisfying investors concerns rather than satisfying the disputing Member States’ concerns.

Third, with limited exceptions, the WTO prohibits unilateral trade remedies. Article 23 of the DSU provides that Member States “shall not make a determination to the effect that a violation has occurred … except through recourse to dispute settlement in accordance with the rules and procedures of this Understanding.” Investment arbitration is not a unilateral remedy imposed in response to a WTO violation, but neither is it WTO dispute settlement. Investment arbitration may provide a vehicle for compensating or attenuating the harm caused to investors without offending the WTO restrictions on unilateral trade remedies.

Fourth, WTO remedies are prospective, while investment arbitration remedies may be retroactive. The goal of the WTO adjudication is to bring Member States into conformity with their trade obligations. The goal of investment arbitration is, consistent with traditional understandings of state responsibility, to “wipe-out all the consequences of the illegal act and reestablish the situation which would, in all probability, have existed if that act had not been committed.”

Fifth, under the WTO dispute settlement process, any losses an investor suffers as a result of a Member State’s WTO violation are not compensable. WTO remedies contemplate compensation directly to a Member State or, failing that, the suspension of concessions paid directly to the Member State in the form of increased duties. With investment arbitration, international law violations result in monetary compensation due directly to the investor.

Thus, liberal interpretations of broad umbrella clauses that encompass investment commitments in WTO undertakings may prove to be an attractive avenue for future investment arbitration.

Simon Lester has a thoughtful response to my earlier post about using trade remedies to enforce arbitration awards. He questions whether conditioning GSP benefits on compliance with arbitration awards is consistent with WTO obligations. My answer is essentially yes. Because there are so many issues at play, I thought it best to respond in a new post rather than respond in the comment section to his post.

First, there is no question that granting preferential treatment for developing countries does not violate MFN rules. That was settled with the so-called Enabling Clause. The real question is whether a particular GSP-scheme is consistent with the Enabling Clause. The Enabling Clause provides that Member States may accord differential and more favorable treatment to developing countries, provided (a) such treatment is non-discriminatory as between similarly-situated developing countries; and (b) is designed to promote the development, financial and trade needs of the developing countries.

As to the first requirement, the Enabling Clause requires GSP benefits to be conferred in a non-discriminatory manner among similarly-situated developing countries. This, according to EC-Tariff Preferences, requires that the relevant preference be made available to all beneficiaries that share that need. (EC-Tariff Preferences, para. 180). That requirement appears to be met. The U.S. obligation on compliance with arbitration awards is applied to all GSP beneficiaries alike. Argentina might have a discrimination argument if other beneficiary countries refuse to honor arbitration awards but still enjoy GSP benefits. But I am not aware of any such examples, and if anything, it appears that other developing countries like Ecuador will soon face a similar fate as Argentina.

Second, the GSP conditional benefit must be imposed to meet particular development, financial or trade needs. In other words, if you are granted benefits with strings attached, those strings must be for the benefit of the developing country. Simon Lester questions whether conditional tariff benefits can ever meet that requirement. I disagree. If you look at the various GSP schemes, the list of such needs are legion, addressing issues such as drug-trafficking, communism, terrorism, human rights, environmental protection, expropriation, contractual compliance, intellectual property protections, etc.

At one level one might view many of these concerns as primarily about protecting developed countries’ interests more than promoting the developing country needs. But, of course, these goals are mutually-beneficial. Goals such as promoting the rule of law, creating a safe and stable legal climate, encouraging foreign investment, good governance, reducing crime and corruption, guaranteeing human rights, and encouraging environmental sustainability are all legitimate objectives that developed countries legitimately can ask developing countries to pursue.

As I discuss in a recent article published in the Santa Clara Journal of International Law, one of the most significant developments signaling the convergence of trade and arbitration is the use of trade remedies to enforce arbitration awards. This is done primarily when a developed country threatens to remove preferential trade benefits to a developing country if that country does not honor its international arbitration commitments.

The WTO allows (but does not require) developed countries to grant preferential trade benefits to “promote the development, financial and trade needs of developing countries.” Many developed countries—including Australia, Canada, the European Union, and the United States—have established such “Generalized System of Preferences” or GSPs to promote trade with developing countries. The major benefit of GSP schemes is the unilaterally lowering of tariff bowers for products from beneficiary countries without a corresponding reduction in tariffs for the developed country’s products.

The discretionary nature of these schemes means that the trade benefits come with strings attached. In the United States and the European Union, for example, developing countries are subject to performance obligations with respect to matters such as drug trafficking, international terrorism, democracy, human rights, environmental protection, government corruption, unlawful expropriation, the rule of law, and good governance.

The United States imposes a number of conditions on beneficiary countries, including that they recognize and enforce arbitral awards in favor of United States nationals. Any country that wishes to secure beneficiary status under the GSP scheme must satisfy this criterion, and any country that fails to maintain this commitment jeopardizes their beneficiary status. The provision was added to the Trade Act of 1974 because of concerns that it was “contrary to sound U.S. policy to give…any… developing nation the favored treatment contemplated by the present legislation in the face of unwillingness to abide by solemn agreements to recognize as final and binding arbitration awards rendered in disputes between it and American parties.” (120 Cong. Rec. 39831).

The use of trade remedies to enforce arbitration awards is best illustrated by the ongoing dispute over Argentina’s refusal to honor adverse investment awards. On March 26, 2012, the Obama Administration announced that Argentina’s GSP beneficiary designation would be suspended “because it has not acted in good faith in enforcing arbitral awards in favor of United States citizens.” It was the first time in American history the United States denied GSP trade benefits to a developing country for its failure to honor arbitration commitments.

I recently wrote a post that described the virtues of international lawyers thinking about the future and having an international law analog to “design fiction.” The main point being we as international lawyers are often so focused on historical examples, issues, and analogies that we need to spend more time considering the technological changes that are upon us and changing the world in which we live. A bit of tech futurism + international legal practice.

One of the best-known critiques of the profession considered the lack of imagination of the international legal profession. In 2001, Martti Koskeniemi wrote in The Gentle Civilizer of Nations that international law had been depoliticized and marginalized “as graphically illustrated by its absence from the arenas of today’s globalization struggles” or it had become “a technical instrument for the advancement of the agendas of powerful interests or actors in the world scene.” (page 3) He further wrote that international lawyers “in the past 40 years have failed to use the imaginative opportunities that were available to them, and open horizons beyond academic and political instrumentalization, in favor of worn-out internationalist causes that form the mainstay of today’s commitment to international law.” (page 5)

Now, having made a plea for a little more tech futurism in international law, I note that Professor Benjamin Bratton has just done a great job of taking the form of technological futurism most prevalent in TED conferences and smacking it upside the head a few times. Moreover, he did this in a sharp TEDx presentation (and an essay in The Guardian). I highly recommend watching the full TED talk. There’s a lot there that also applies to international legal profession.

Bratton describes the problem of “placebo politics”—focusing on technology and innovation as the solution to major world problems, but not taking into account the difficult issues of history, economics, and politics that bedevil actual workable solutions. Problems become oversimplified. He wrote in The Guardian:

Perhaps the pinnacle of placebo politics and innovation was featured at TEDx San Diego in 2011. You’re familiar I assume with Kony2012, the social media campaign to stop war crimes in central Africa? So what happened here? Evangelical surfer bro goes to help kids in Africa. He makes a campy video explaining genocide to the cast of Glee. The world finds his public epiphany to be shallow to the point of self-delusion. The complex geopolitics of central Africa are left undisturbed. Kony’s still there. The end.

You see, when inspiration becomes manipulation, inspiration becomes obfuscation. If you are not cynical you should be sceptical. You should be as sceptical of placebo politics as you are placebo medicine.

If we really want transformation, we have to slog through the hard stuff (history, economics, philosophy, art, ambiguities, contradictions). Bracketing it off to the side to focus just on technology, or just on innovation, actually prevents transformation.

Instead of dumbing-down the future, we need to raise the level of general understanding to the level of complexity of the systems in which we are embedded and which are embedded in us. This is not about “personal stories of inspiration”, it’s about the difficult and uncertain work of demystification and reconceptualisation: the hard stuff that really changes how we think. More Copernicus, less Tony Robbins.

[Emphases added.]

International lawyers can be (but aren’t always) good at the facts on the ground, the messy realities of history, politics, economics. If my previous post was about how lawyers need to keep a weather eye on how new tech is changing the present and shaping the future, then Bratton reminds us how the technologists need to appreciate the hard realities of the present and to remember the lessons of past. In other words, each of us has a lot to learn from the other.

All Things Considered ran an interview this past Monday with Alex Fowler, the chief privacy officer of Mozilla (developer of the Firefox web browser), stemming from a blog post Fowler had written critiquing President Obama’s speech last week concerning NSA activities. When asked about the “most glaring reform needs” that were not addressed in the President’s speech, Fowler said:

right now, we have a policy approach in Washington which is focused on not closing security holes but actually [on] hoarding information about security backdoors and holes in our public security standards and using those then to exploit them for intelligence needs. In our perspective, and I think certainly those of your listeners – as you think about the news related to Target data breaches and breaches with Snapchat and other common tools that we use every day – that what we really need is to actually focus on securing those communications platforms so that we can rely on them. And that we know that they are essentially protecting the communications that we’re engaged with.

This relates to the market for so-called “zero-day exploits,” where the U.S. government pays hackers for information about holes in software security that its intelligence and law enforcement agencies can then use for surveillance. (The market for zero-day exploits is described in greater detail in this previous post.) The U.S. also pays the sellers of these exploits to keep the holes secret, not even warning the company that has the security hole, so that the exploit may remain useful to the U.S. government for as long as possible. Unfortunately, this also means it will remain open for criminal hackers who have also discovered the hole.

The injection of U.S. government funds has transformed a formerly loose, reputation-based, market into a lucrative global bazaar with governments driving up prices and the formation of firms with business models based on finding and selling exploits to the U.S. and other governments. Although cash-rich companies like Microsoft are responding by trying to out-bid state actors for information about zero day exploits in their own products, the money in the market has shifted from rewarding security into incentivizing insecurity…

There’s never a boring year in international law and 2013 turned out to be particularly eventful: Syria, major cases in front of national and international courts, a possible nuclear deal with Iran, and turmoil in Eastern Europe, Egypt, and South Sudan, to name but a few reasons.

This post is not an attempt to log all that we have written about on Opinio Juris this year. There’s just too much. If any of these topics (or others) are of particular interest to you, you can use our search function to find the posts related to them. Rather, this post is an idiosyncratic tour of some of the highways, back roads, and other territory that we traversed in 2013… (Continue Reading)

January 1st, 2014 - 2:15 PM EDT | Comments Off on Exploring International Law with Opinio Juris in 2013: Highways, Back Roads, and Uncharted Territories… | Continue Reading »http://opiniojuris.org/2014/01/01/exploring-international-law-opinio-juris-2013-highways-back-roads-uncharted-territories/ |

We write on behalf of New York University to express our disappointment, disagreement, and opposition to the boycott advocated by your organization of Israeli academics and academic institutions.

This boycott is at heart a disavowal of the free exchange of ideas and the free association of scholars that undergird academic freedom; as such, it is antithetical to the values and tenets of institutions of advanced learning.

I have no desire to wade into the debate over academic BDS, other than to say I’m generally wary of academic boycotts, but find it distressing that those who criticize the ASA for undermining academic freedom somehow never get around to criticizing Israel for its ongoing repression of Palestinian academics and students.

That said, NYU is the last university that should be issuing flowery defences of academic freedom. As Anna Louise Sussman points out in The Nation, President Sexton has not only refused to criticize the repression of academics in the UAE, where NYU has a campus, he has made statements that actually justify that repression:

Since April 8 the Emirati government has arrested five prominent Emiratis—activists, bloggers and an academic—for signing a petition calling for reform, and thrown them in jail, where they remain to this day. They are being held without charges, although they are in contact with their families and lawyers.

[snip]

Dr. Christopher Davidson, a reader in Middle East politics at Durham University who specializes in the politico-economic development in the Gulf, believes that by arresting people like Professor bin Ghaith, a high-profile academic, the government hopes to show that no one—no matter how connected they are—is beyond the government’s reach. Even Professor bin Ghaith’s connections to Paris-Sorbonne couldn’t save him, although Davidson chalks that up to the Sorbonne’s notable lack of response.

[snip]

According to NYU sociology Professor Andrew Ross, who has been an outspoken critic of the university’s involvement in the autocratic city-state, NYU president John Sexton recently told a group of concerned faculty members that he had reason to believe those arrested were a genuine threat to national security, something that Professor Lockman finds “particularly shocking.”

“He suggested that these people were genuinely subversive and deserving of arrest, although human rights organizations, of course, have a different take,” said Lockman. “This kind of toadying to the crown prince and his ilk shows the hollowness of NYU’s role in this place.”

Ross and his colleagues at the New York chapter of the American Association of University Professors sent a letter addressed to Dean Sexton and Vice-Chancellor Al Bloom, warning that “Silence on this serious issue will set a precedent that could also have ominous consequences for the speech protections of NYUAD faculty.”

Apparently, academic freedom is important to NYU only when it’s Israeli academics whose freedom is at stake. The academic freedom — and actual freedom — of academics in states in which NYU has business interests? Not so much.

Hat-Tip: Max Blumenthal.

NOTE: For more about President Sexton’s unwillingness to defend academic freedom in the UAE, see this essay in The Atlantic. The articles notes that, ironically, the UAE discriminates against Israeli students who want to study in the country.

Novelists such as H.G. Wells and George Orwell used fantastic fiction to describe their world as it was and to imagine, to use Wells’ title, “The Shape of Things to Come.” This past summer I wrote a post on what current science fiction can bring to international law. I mentioned various books that, though fantastic, illuminated topics related to international law, international relations, or national security.

So, Snowden reveals that U.S. intelligence agents are posing as, let’s say, warrior elves and they’re running around on quests in World of Warcraft looking for al Qaeda organizers. I’m just not all that surprised. It is a bit amusing, though, that there ended up being so many intelligence officers online that they had to set up a “deconfliction group” to keep track of who was really whom, so that some Jack Ryan posing as a warrior elf wouldn’t report a wizard as being an al Qaeda operative when that wizard is actually a US agent posing as an al Qaeda operative who’s avatar is a wizard. This truly is “The Looking Glass War.”

At this point, I’m clutching my head. “Halting State” wasn’t intended to be predictive when I started writing it in 2006. Trouble is, about the only parts that haven’t happened yet are Scottish Independence and the use of actual quantum computers for cracking public key encryption (and there’s a big fat question mark over the latter—what else are the NSA up to?).

I’m throwing in the towel.…<snip> …The science fictional universe of “Halting State” and “Rule 34″ is teetering on the edge of turning into reality. Meanwhile, the financial crisis of 2007 forced me back to the drawing board for “Rule 34″; the Snowden revelations have systematically trashed all my ideas for the third book.

Our colleagues in the world of architecture and design have “design fiction”: films and websites devoted to as-yet non-existent objects as a means of thinking about the possibilities of design and engineering and their relationship to society. Here are three very different examples (noted by Tobias Revell in the previous link): “New Mumbai,” “Microsoft’s Productivity Future Vision,” and “Post CyberWar.”

Simon Lester of the IELP Blog raises an interesting and possibly important point about the new WTO Agreement just reached in Bali. In order for the U.S. to enter into the agreement, will the U.S. Congress have to approve it?

On first glance, the answer would seem to be: “yes” since the U.S. Congress invariably is required to approve all U.S. trade agreements (as opposed to just the Senate, if it were a treaty). In any event, I would have thought the U.S. Congress would have to approve the new Bali agreement as new legislation. But then Simon points out this comment by U.S. trade officials from Inside U.S. Trade:

At the press conference, Punke said the Obama administration does not believe the deal requires congressional approval. “Our analysis of the trade facilitation agreement is it can be effectuated through administrative means and would not require legislation to put it into force,” he said. The obligations of the trade facilitation agreement are enforceable under the WTO Dispute Settlement Understanding.

This makes sense if one thinks of congressional approval of executive agreements as simply implementation of international obligations into domestic U.S. law. But the congressional role in trade agreements has also been understood to fill in for the role of the U.S. Senate in approving treaties even if those treaties have no domestic law impact. For U.S. law purposes, the President can’t enter into a treaty unless the Senate gives its advice and consent. In the trade agreement context, I think many scholars have thought that Congress’ approval of those agreements by a majority of both houses serves the same role of giving the input of the legislature on the President’s decisions to enter into international agreements.

Or perhaps not. Maybe the President really is free to bind the U.S. under international law via executive agreement on trade matters without any approval of Congress as long as no domestic law change is needed. This means that trade agreements really are just sole executive agreements that Congress is not really approving, but just implementing into U.S. domestic law. And if no implementation is required, no Congress. This makes sense, but I just don’t think this the common understanding of how or why these congressional-executive agreements work.

One way out of this problem is (as Simon also points out) to understand the Bali Agreement as an amendment to the WTO Agreement. That agreement (in Art. X) specifically outlines a mechanism for amendment which requires “consensus” (e.g. unanimity) or (depending on which provision is being affected) a two-thirds vote of the Ministerial Conference. In this way, Congress may be understood to have already approved future amendments to the WTO Agreement when it “approved” the original WTO Agreement back in 1994. This “delegation” theory is probably a better explanation of why no congressional approval qua approval is needed for the Bali Agreement. Not totally satisfying, but probably enough here.

The WTO’s new Director-General Roberto Azevedo is celebrating a rare event: The WTO’s entire 159-country membership has finally reached a new multilateral agreement. This is the first time that the WTO’s membership as a whole (as opposed to smaller groups of its member states) has reached an agreement since it was formed in 1994 and the first set of agreements under the so-called “Doha” round of negotiations that has been going on since 2001. Most commentary in the United States and elsewhere describe this as a pretty small-bore agreement on trade facilitation and agriculture (especially given the scope of the original agenda under Doha).

I am intrigued by some commentary coming out of Bali to the effect that a new agreement is needed to keep the WTO relevant and legitimate in the eyes of its members. The WSJ has this unattributed comment:

Some negotiators said the limited pact gives the WTO credibility to continue its other main role: as an arbiter of trade disputes.

The WTO works by consensus and the breakdown of the talks could also have hurt the organization’s dispute-settling mechanism, they said.

I guess I am skeptical that the lack of progress on new agreements will have any serious impact on the ability of the WTO’s famous dispute settlement body to stay relevant. With or without the new agreement, the WTO is already an immensely deep and complex web of legal obligations for a larger and larger set of members. Interpreting these obligations, and managing disputes, is probably significant enough to most members that they don’t feel like they need a new agreement to stay engaged.

Anyway, the Bali agreement is only a “draft ministerial declaration” which needs to be formalized next year. Then, the U.S. Congress will have a chance to vote on it (and probably the Asian and European regional trade deals). This ought to be loads of fun in a congressional election year. At least they don’t have to get two-thirds of the U.S. Senate on board.

December 7th, 2013 - 9:04 AM EDT | Comments Off on Does the WTO need a New Agreement to Save its Dispute Settlement System?http://opiniojuris.org/2013/12/07/wtos-decision-making-process-democratic/ |

July 24, 2015Recent International Legal Scholarship on the Crisis in Ukraine
As the fighting in Ukraine continues into its second year, recent reports have variously focused on the promise of a weapons withdrawal and the risk that there is the opening of a new front opening. Recent international legal scholarship has attempte...